Apple's online store will launch within months, says Tim Cook
What's the story
For years, Apple has followed a third-party approach to sell in India.
The effort has helped the company take on Samsung and other giants, but all of that is about to change now.
Tim Cook, the CEO of the company, has announced that Apple will soon start direct selling in India - to make the most of the world's fastest-growing smartphone market.
Here's more.
Comments
Online store this year, physical outlet next year, says Cook
Speaking at the recent annual shareholder meeting, Cook announced Apple's future plan of conducting business in India.
He said the company will open its online store sometime this year while the first flagship brick-and-mortar outlet in the country will be opened in 2021.
"I'm a huge believer in the opportunity in India," he said while adding that it's a country with "unparalleled" demographics.
Plan
Apple's struggle in budget-focused Indian market
India is the world's second-largest smartphone market and is still growing at a progressive rate.
However, the thing is, most of the buyers in the country are focused on the budget category which has been a long-persisting challenge for Apple.
Specifically, the flagship-grade Apple iPhones, which are already sold at hefty prices, became even more expensive after being imported to India for third-party selling.
Change
Heavy import duties prompted Apple to manufacture locally
To tackle this problem and cut down on heavy import duties, Apple began assembling some of its devices, including iPhone 6s and SE models, locally in India.
The move allowed the company to take advantage of several incentives provided by the Indian government for local manufacturing, eventually making a number of older iPhones cheaper in the country.
Data
iPhone shipments have increased drastically
The action taken by Apple, combined with bank offers, has already started boosting sales. According to research firm Canalys, the company shipped nearly 925,000 iPhones in the quarter ending December, which is nearly 200% more than the figure reported for the previous year's quarter.
Plan
Now, Apple will expand by direct selling
Apple will now build on this growth by selling iPhones directly in the country.
The company has been trying to set up stores for years, but the effort was largely blocked by the Indian government's FDI regulations, which required foreign companies to source at least 30% of their products locally to open retail stores.
Just recently, those rules were eased by the government.
Information
Apple allowed to factor in exports
In August 2019, PM Narendra Modi-led Centre had lowered the local sourcing restrictions by allowing foreign companies, including Apple, to factor in products made locally but for export.
Benefits
This would benefit both Apple and Indian economy
Beyond boosting Apple's market share, Indian stores would also offer some additional benefits to the company.
First, amid deteriorating US-China trade relations, the Indian business will allow the company to build an alternate supply chain to reduce its dependency on China.
Secondly, Apple's stores will create more jobs in the country, potentially boosting our economy.